Investors irked by land tender process
Officials with AIG/Lincoln and an unnamed developer represented by international brokerage firm Healey & Baker have lost interest in buying 42 hectares of land being offered by National Investment Fund (NIF) No. 10 Foksal in Pruszkow, a small town about 10 kilometers west of Warsaw.
This could further delay development of one of the most valuable industrial sites in the Warsaw area, worth an estimated zl. 42 million ($12 million).
"The whole tender process has been cloaked in secrecy and a lack of clear and transparent information. This deters serious investors," said Richard Peterson, partner and managing director with Healey & Baker, which represented an industrial investor interested in turning the site into a warehouse and distribution center.
"We withdrew our interest because of what we believed was inappropriate management of the tender process," added Brian Patterson, managing partner of AIG/Lincoln, one of the largest and most active foreign investors in Poland's real estate market. AIG/Lincoln is a partnership between American International Group Inc., an international insurance company, and U.S.-based Lincoln Property Co. The exit of such big-name investors has aroused concern that NIF No. 10 is bungling the tender process and could have difficulty finding a developer willing to build on the property. Developers saw the plot - a 42-hectare parcel located next to the Pruszkow railway station and the highway from Warsaw to Poznan - as a prime location for a warehouse and distribution center.
The land up for tender is currently owned by Zaklady Naprawy Taboru Kolejowego (ZNTK), a company that repairs passenger cars and has been under liquidation since April 1997. ZNTK's shares are divided between NIF No. 10 (33%), the State Treasury (25%), other NIFs (27%) and its employees (15%). In November the company's liquidator, law firm De Iure Legal Office in Warsaw, announced a public tender to sell the 42 hectares. The company has yet to find a buyer, despite the plot's prime location near major transportation corridors. "You must realize, it's not easy to sell such a large piece of land," said Juliusz Kajkowski, portfolio manager at NIF No. 10.
But potential bidders said they have been discouraged by the absence of information regarding the tender. "We learned about this (tender) only a couple of weeks ago and that's a bit strange. Why wasn't this advertised more openly?" asked Rafal Nowicki, vice president of finance at Rida Development, a U.S.-based commercial real estate developer that built the six-story Ericsson Centre on ulica Kasprzaka.
To complicate matters, the 42 hectares in Pruszkow once housed a temporary camp for Polish prisoners during the World War II. More than 600,000 Poles passed through the camp, which was run by the Gestapo from August 1944 until January 1945, with prisoners staying for several days to several months.
"I suppose that some investors were discouraged that a prison camp was once located on this (property)," said Kajkowski, who noted that much of the property was under the supervision of the Society for Preservation of Public Monuments.
But private developers said they were more concerned with the tender process than the historic significance of the site. Some complained that they made bids, but never received a response from De Iure Legal Office, the firm hired by NIF No. 10 to find a buyer for the property and the company's shares.
Peterson of Healey & Baker said the property was never properly advertised and bidders were never told what information to provide in their bids. "The best way to conduct a tender is to advertise (the property) extensively to get the best price. That was never done," he said. As a result, the developer represented by Healey & Baker - whom Peterson preferred not to name - removed its bid. "It was never made clear what the rules were," he said.
Kajkowski of NIF No. 10 defended the tender process. He noted that three advertisements concerning the tender were placed in Polish newspapers, including two announcements in Rzeczpospolita. "We announced the sale and now we're searching for buyers. This has been a transparent process," he said.
This could further delay development of one of the most valuable industrial sites in the Warsaw area, worth an estimated zl. 42 million ($12 million).
"The whole tender process has been cloaked in secrecy and a lack of clear and transparent information. This deters serious investors," said Richard Peterson, partner and managing director with Healey & Baker, which represented an industrial investor interested in turning the site into a warehouse and distribution center.
"We withdrew our interest because of what we believed was inappropriate management of the tender process," added Brian Patterson, managing partner of AIG/Lincoln, one of the largest and most active foreign investors in Poland's real estate market. AIG/Lincoln is a partnership between American International Group Inc., an international insurance company, and U.S.-based Lincoln Property Co. The exit of such big-name investors has aroused concern that NIF No. 10 is bungling the tender process and could have difficulty finding a developer willing to build on the property. Developers saw the plot - a 42-hectare parcel located next to the Pruszkow railway station and the highway from Warsaw to Poznan - as a prime location for a warehouse and distribution center.
The land up for tender is currently owned by Zaklady Naprawy Taboru Kolejowego (ZNTK), a company that repairs passenger cars and has been under liquidation since April 1997. ZNTK's shares are divided between NIF No. 10 (33%), the State Treasury (25%), other NIFs (27%) and its employees (15%). In November the company's liquidator, law firm De Iure Legal Office in Warsaw, announced a public tender to sell the 42 hectares. The company has yet to find a buyer, despite the plot's prime location near major transportation corridors. "You must realize, it's not easy to sell such a large piece of land," said Juliusz Kajkowski, portfolio manager at NIF No. 10.
But potential bidders said they have been discouraged by the absence of information regarding the tender. "We learned about this (tender) only a couple of weeks ago and that's a bit strange. Why wasn't this advertised more openly?" asked Rafal Nowicki, vice president of finance at Rida Development, a U.S.-based commercial real estate developer that built the six-story Ericsson Centre on ulica Kasprzaka.
To complicate matters, the 42 hectares in Pruszkow once housed a temporary camp for Polish prisoners during the World War II. More than 600,000 Poles passed through the camp, which was run by the Gestapo from August 1944 until January 1945, with prisoners staying for several days to several months.
"I suppose that some investors were discouraged that a prison camp was once located on this (property)," said Kajkowski, who noted that much of the property was under the supervision of the Society for Preservation of Public Monuments.
But private developers said they were more concerned with the tender process than the historic significance of the site. Some complained that they made bids, but never received a response from De Iure Legal Office, the firm hired by NIF No. 10 to find a buyer for the property and the company's shares.
Peterson of Healey & Baker said the property was never properly advertised and bidders were never told what information to provide in their bids. "The best way to conduct a tender is to advertise (the property) extensively to get the best price. That was never done," he said. As a result, the developer represented by Healey & Baker - whom Peterson preferred not to name - removed its bid. "It was never made clear what the rules were," he said.
Kajkowski of NIF No. 10 defended the tender process. He noted that three advertisements concerning the tender were placed in Polish newspapers, including two announcements in Rzeczpospolita. "We announced the sale and now we're searching for buyers. This has been a transparent process," he said.
